Rockline Ltd v Silverlink Holdings: Breach of Contract over Refusal to Issue Corporate Notes
Rockline Ltd and Superon International Limited, owned by Schroder Asian Properties Fund, sued Silverlink Holdings Limited and Argent Holdings Limited in the High Court of Singapore before Choo Han Teck J, for breach of contract. The plaintiffs claimed the defendants failed to issue Secured Convertible Redeemable Notes as consideration for the repurchase of Superon's interest in Silverlink. The defendants argued that the issuance was conditional on documenting SVAPF Control, which had not occurred. The court found the defendants in breach of contract for failing to issue the Rockline Note and for breaching obligations related to the Superon Repurchase. The court held that the Outline was not binding on the plaintiffs and third parties, and the third parties were not parties to the Capital Raising Agreement.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiffs
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Rockline Ltd sues Silverlink Holdings for breach of contract for refusing to issue corporate notes. The court found Silverlink in breach.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Rockline Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | Indranee Rajah, Rakesh Kirpalani, Tan Shou Min, Arvindran Manoosegaran |
| Superon International Limited | Plaintiff | Corporation | Judgment for Plaintiff | Won | Indranee Rajah, Rakesh Kirpalani, Tan Shou Min, Arvindran Manoosegaran |
| Silverlink Holdings Ltd | Defendant | Corporation | Judgment against Defendant | Lost | Kannan Ramesh, Eddee Ng, Cheryl Koh, Emmeline Lim |
| Argent Holdings Limited | Defendant | Corporation | Judgment against Defendant | Lost | Kannan Ramesh, Eddee Ng, Cheryl Koh, Emmeline Lim |
| Schroder Venture Managers Inc | Third Party | Corporation | Neutral | Neutral | S Suressh, Sharmini Selvaratnam |
| Anchor Victory Ltd | Third Party | Corporation | Neutral | Neutral | S Suressh, Sharmini Selvaratnam |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Choo Han Teck | J | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Indranee Rajah | Drew & Napier LLP |
| Rakesh Kirpalani | Drew & Napier LLP |
| Tan Shou Min | Drew & Napier LLP |
| Arvindran Manoosegaran | Drew & Napier LLP |
| Kannan Ramesh | Tan Kok Quan Partnership |
| Eddee Ng | Tan Kok Quan Partnership |
| Cheryl Koh | Tan Kok Quan Partnership |
| Emmeline Lim | Tan Kok Quan Partnership |
| S Suressh | Harry Elias Partnership |
| Sharmini Selvaratnam | Harry Elias Partnership |
| Vinodh Coomaraswamy | ShookLin & Bok LLP |
| David Chan | ShookLin & Bok LLP |
| Francis Xavier | Rajah & Tann LLP |
| Tang Hui Jing | Rajah & Tann LLP |
4. Facts
- Rockline and Superon, owned by SAP, claimed Silverlink and Argent failed to issue Secured Convertible Redeemable Notes.
- The notes were consideration for the repurchase of Superon's indirect interest in Silverlink.
- Silverlink argued issuance was conditional on documenting SVAPF Control, which didn't happen.
- SVAPF gave a US$79.5m loan to Silverlink in return for a SCRN (SVAPF Note).
- The Rockline repurchase was completed, but the Rockline Note was not issued.
- Superon tendered its shares for repurchase, but the defendants did not complete the Superon Repurchase.
- The plaintiffs contended that the SAP Notes ranked pari passu with the SVAPF Note and the former were not intended to be issued subject to SVAPF Control.
5. Formal Citations
- Rockline Ltd and another v Silverlink Holdings Ltd and another (Schroder Venture Managers Inc and another, third parties) and another suit, Suit No 834 of 2005 and Suit No 375 of 2007, [2010] SGHC 127
- Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd, , [2008] 3 SLR(R) 1029
- Skandinaviska Enskilda Banken v Asia Pacific Breweries (Singapore) Pte Ltd, , [2009] SLR(R) 788
- Ng Giap Hon v Westcomb Securities Pte Ltd, , [2009] 3 SLR(R) 518
6. Timeline
| Date | Event |
|---|---|
| Fund Management Agreement between SVMI and SVML dated | |
| SVAPF gave a loan of US$79.5m to Silverlink through AVL | |
| AT and DS signed the Outline | |
| Rockline Repurchase Agreement executed | |
| Post-conflict letter by Lester Gray of Schroders plc to investors of SVAPF | |
| Repayment date specified in SVAPF Note | |
| Decision Date |
7. Legal Issues
- Breach of Contract
- Outcome: The court found the defendants in breach of contract for failing to issue the Rockline Note and for breaching their obligations in relation to the Superon Repurchase.
- Category: Substantive
- Sub-Issues:
- Failure to issue Secured Convertible Redeemable Notes
- Failure to complete Superon Repurchase
- Implied Terms
- Outcome: The court held that SVAPF Control could not be implied as the issue was obviously within the parties’ contemplation on or around the time the RRA was concluded.
- Category: Substantive
- Related Cases:
- [2009] 3 SLR(R) 518
- Estoppel by Convention
- Outcome: The court found that there was no evidence that the parties had acted in a manner suggesting that SVAPF Control was a condition precedent to the issuance of the SAP Notes and thus no estoppel could be raised in their favour.
- Category: Substantive
- Authority to Bind
- Outcome: The court found that SCPL and AT had no authority (whether actual, implied or ostensible) to agree to SVAPF Control.
- Category: Substantive
- Related Cases:
- [2009] SLR(R) 788
8. Remedies Sought
- Issuance of Secured Convertible Redeemable Notes
- Damages for breach of contract
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Finance
- Investment Management
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd | Court of Appeal | Yes | [2008] 3 SLR(R) 1029 | Singapore | Cited to persuade the court to adopt a contextual approach to contractual interpretation. |
| Skandinaviska Enskilda Banken v Asia Pacific Breweries (Singapore) Pte Ltd | N/A | Yes | [2009] SLR(R) 788 | Singapore | Cited regarding implied actual authority or ostensible authority. |
| Ng Giap Hon v Westcomb Securities Pte Ltd | Court of Appeal | Yes | [2009] 3 SLR(R) 518 | Singapore | The law on implied terms was discussed. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Secured Convertible Redeemable Notes
- Rockline Repurchase Agreement
- SVAPF Control
- SVAPF Note
- SAP Notes
- Pari Passu
- Outline of the Principal Terms of Agreement
- Downside Protection Agreement
- Nominee
- Pre-emption Rights
15.2 Keywords
- breach of contract
- secured convertible redeemable notes
- SVAPF control
- repurchase agreement
- corporate notes
16. Subjects
- Contract Law
- Corporate Finance
- Securities Law
17. Areas of Law
- Contract Law
- Corporate Law
- Breach of Contract